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Standing Committee on Coal and Steel (2017-2018) 43 Sixteenth Lok Sabha

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Standing Committee on Coal and Steel (2017-2018) 43 Sixteenth Lok Sabha STANDING COMMITTEE ON COAL AND STEEL (2017-2018) 43 SIXTEENTH LOK SABHA MINISTRY OF STEEL "Physical and Financial Performance of SAIL and MECON Ltd." [Action Taken by the Government on the Observations/ Recommendations contained in the Thirty-Seventh Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha)] FORTY-THIRD REPORT LOK SABHA SECRETARIAT NEW DELHI AUGUST, 2018/ SHRAVANA, 1940(Saka) FORTY-THIRD REPORT STANDING COMMITTEE ON COAL AND STEEL (2017-2018) (SIXTEENTH LOK SABHA) MINISTRY OF STEEL "Physical and Financial Performance of SAIL and MECON Ltd." [Action Taken by the Government on the Observations/ Recommendations contained in the Thirty-Seventh Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha)] Presented to Lok Sabha on 02.08.2018 Laid in Rajya Sabha on 02.08.2018 LOK SABHA SECRETARIAT NEW DELHI August, 2018/Shravana 1940(Saka) CONTENTS Page Composition of the Committee (ii) Introduction (iv) Chapter – I Report……………………………………………………………………………. 1 Chapter – II Observations/Recommendations that have been accepted by Government………………………………………………. 16 Chapter – III Observations/Recommendations which the Committee do not desire to pursue in view of the Government's replies……………………………………………………………………………… 25 Chapter – IV Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee………………………………………………………………… 26 Chapter – V Observations/Recommendations in respect of which final replies of the Government are still awaited……………………………………………………………………………. 31 ANNEXURES I Minutes of the sitting of the Standing Committee on Coal and Steel (2017-18) held on __.07.2018 …......... 36 II Analysis of Action Taken by the Government on the Recommendations contained in the Thirty-Seventh Report of the Standing Committee on Coal and Steel (Sixteenth Lok Sabha) ………………………………………………… 38 COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL(2017-18) Chairperson - Shri Rakesh Singh Lok Sabha 2. Shri Idris Ali 3. Shri A. Arunmozhithevan 4. Shri Chandulal Sahu 5. Smt. Jyoti Dhurve 6. Shri Shailesh Kumar 7. Dr. Banshilal Mahato 8. Shri Kamalbhan Singh Marabi 9. Shri Godam Nagesh 10. Shri Ajay Nishad 11. Smt. Riti Pathak 12. Smt. Ranjeet Ranjan 13. Shri Ravindra Kumar Ray 14. Shri Tamradhwaj Sahu 15. Shri Tathagata Satpathy 16. Shri Janardan Singh ‘Sigriwal’ 17. Shri Pashupati Nath Singh 18. Shri Rama Kishore Singh 19. Shri Sunil Kumar Singh 20. Shri Sushil Kumar Singh 21. Shri Krupal Balaji Tumane Rajya Sabha 22. Shri Ranjib Biswal 23. Shri Ranvijay Singh Judev 24. Shri Ram Vichar Netam 25. Shri Sanjay Singh^ 26. Shri Samir Oraon* 27. Shri Dhiraj Prasad Sahu* 28. Shri Achyutananda Samanta* 29. Prof. Manoj Kumar Jha* 30. Shri Prabhaker Reddy Vemireddy* 31. Vacant ________________________________________________________ ^ Nominated w.e.f. 13.02.2018. * Nominated w.e.f. 02.06.2018 (ii) SECRETARIAT 1. Shri U.B.S. Negi - Joint Secretary 2. Shri Ajay Kumar Garg - Director 3. Shri Arvind Sharma - Additional Director 4. Smt. Vandana Pathania Guleria - Executive Officer (iii) INTRODUCTION I, the Chairperson, Standing Committee on Coal and Steel having been authorised by the Committee to present the Report on their behalf, present this Forty-Third Report (Sixteenth Lok Sabha) on Action Taken by the Government on the observations/ recommendations contained in the Thirty-Seventh Report (Sixteenth Lok Sabha) of the Standing Committee on Coal and Steel on "Physical and Financial Performance of SAIL and MECON Ltd." relating to the Ministry of Steel. 2. The Thirty-Seventh Report (Sixteenth Lok Sabha) of the Standing Committee on Coal and Steel was presented to Lok Sabha on 04.01.2018. Replies of the Government to all the observations/recommendations contained in the Report were received on 19.03.2018. 3. The Standing Committee on Coal and Steel considered and adopted this Report at their sitting held on 25.07.2018. 4. An analysis on the Action Taken by the Government on the observations/ recommendations contained in the Thirty-Seventh (Sixteenth Lok Sabha) of the Committee is given at Annexure-II. 5. For facility of reference and convenience, the observations and recommendations of the Committee have been printed in bold letters in Chapter-I of the Report. NEW DELHI; RAKESH SINGH 25 July, 2018 Chairperson 03 Shravana, 1940(Saka)Standing Committee on Coal and Steel (iv) REPORT CHAPTER I This Report of the Standing Committee deals with Action Taken by the Government on the observations/recommendations contained in the Thirty-Seventh Report (Sixteenth Lok Sabha) of the Standing Committee on Coal and Steel on the subject, "Physical and Financial Performance of SAIL and MECON Ltd." relating to the Ministry of Steel which was presented to Lok Sabha and laid in Rajya Sabha on 04.01.2018. 2. The Report contained 14 Observations/Recommendations. The Action Taken Replies have been received from the Ministry of Steel in respect of all the 14 observations/recommendations contained in the Report on 19.03.2018. These have been categorised as follows:- (i) Observations/Recommendations which have been accepted by the Government: Serial Nos. 1, 5, 6, 7, 8, 10,11 and 12 Total : 08 Chapter-II (ii) Observations/Recommendations which the Committee do not desire to pursue in view of the replies of the Government: Serial No. Nil Total : 00 Chapter-III (iii) Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee: Serial Nos. 2, 3 and 14 Total : 03 Chapter-IV (iv) Observations/Recommendations in respect of which final replies of the Government are still awaited: Serial No. 4, 9 and 13 Total : 03 Chapter-V 3. The Committee trust that utmost importance would be given to implementation of the Observations/Recommendations accepted by the Government. In case, where it is not possible for the Ministry to implement the recommendations in letter and spirit for any reason, the matter should be reported to the Committee with reasons for non-implementation. The Committee desire that Action Taken Replies on the Observations/Recommendations contained in Chapter-I and Final Action Taken Notes to the recommendations contained in Chapter-V of this Report be furnished to them within three months. 4. The Committee will now deal with the Action Taken by the Government on some of their observations/recommendations made in the Thirty-Seventh Report. Recommendation No. 1 PHYSICAL PERFORMANCE OF SAIL 5. The Committee noted that over the last 2 years, the SAIL had made considerable progress in enhancing its physical performance. During 2016- 17, SAIL achieved highest ever production of crude steel in a year at 14.50 MT with a growth of 2% over the last year and saleable steel at 13.87 MT with a growth of 12% over the last year. During the year 2016-17, SAIL achieved highest ever saleable steal sale and production of Saleable Steel in a year. Further, the Committee also observed that SAIL achieved highest ever Hot Metal production at 15.73 Million Tonnes (MT), Crude Steel production at 14.50 MT and Saleable Steel production at 13.87 MT during financial year 2016-17. The Committee further observed that during the first half of 2017-18, against the plan production of Hot Metal at 7.99 MT, the actuals were 7.61 MT and against crude Steel production target of 7.54 MT, the actuals were 7.13 MT. SAIL had also undertaken expansion of its integrated steel plants at Bhilai, Bokaro, Raurkela, Durgapur and Burnpur and Special Steel Plant at Salem. There were all round improvements in major techno-economic parameters. The Committee appreciated that even in wake of unprecedented increase in input prices and subdued demand for steel, the performance of SAIL on various parameters had improved. At the same time, the Committee felt that SAIL should step up the good efforts for overall improvement in its physical performance so as to make the company more competitive with other players in the market. 6. In its action taken reply, the Ministry of Steel has stated as under:- "Several initiatives have been taken by SAIL including appointment of BCG & Experts for suggesting measures for overall growth of SAIL. This has resulted in improved performance upto 9M’2017-18 over the same period last year. The growth in 9M’2017-18 over 9M’2016-17 in respect of Hot Metal is 1%, for Crude Steel growth is 3% and in Saleable Steel is 0.1%. " 7. While reviewing the Physical and Financial Performance of SAIL, the Committee in their original report had appreciated the all round improvements in major techno economic parameters in SAIL despite increase in input prices and subdued demand of steel and had desired that SAIL should step up the good efforts for overall improvement in its physical performance so as to make the company more competitive compared to other players in the market. In their Action Taken Reply, the Ministry of Steel has informed the Committee that for 9M' 2017-18, as compared to 9M' 2016-17, there has been improved physical performance by SAIL to the tune of 1% for Hot Metal, 3% for crude steel growth & 0.1% for saleable steel. It has been further mentioned that these results have been achieved due to several initiatives taken by SAIL including appointment of BCG(Boston Consulting Group) & Experts for suggesting measures for overall growth of SAIL. While appreciating the performance by SAIL, the Committee would also like to be apprised of the major recommendations/ suggestions made by BCG (Boston Consulting Group) & Experts and subsequent initiatives taken by SAIL in this regard. Recommendation No.2 CAPACITY UTILIZATION BY SAIL PLANTS 8. The Committee observed that against the installed capacity of 12.8 MT of Crude Steel Production during 2014-15, the actual production was 13.90 MT and thus achieving 107% of capacity utilization. Against the installed capacity of 16.8 MTPA during 2015-16 and 2016-17, the total Crude Steel production by SAIL was 14.27 MT and 14.50 MT respectively showing 85% and 86% of capacity utilization.
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